Price good, cap bad

March 8th, 2012 at 11:00 am by David Farrar

Hamish Fletcher at NZ Herald reports:

has beaten its competitors with the announcement of ultra-fast broadband prices, but there is still no word on what content packages will be available to entice consumers to sign up.

Chief executive Scott Bartlett revealed Orcon’s plans yesterday and said the entry-level option of $75 per month for residential customers was on par with what the company charges now.

This plan, which includes phone services, comes with download speeds of 30 megabits per second, upload speeds of 10 megabits per second and a data allowance of 30 gigabytes per month.

That’s not a bad price for a fibre connection. But the data cap limit is laughable. I have twice that with my copper connection.

30 Mb/s is 3.75 MB/s. That is 225 MB per minute. That is 13.5 GB per hour. So the monthly data cap of 30 GB will last two hours and 13 minutes at 30 MB/s.

should be in TB, not GB.

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18 Responses to “Price good, cap bad”

  1. adamsmith1922 (890 comments) says:

    So now we know “Ultra Fast’ = ultra expensive = major rip-off

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  2. anonymouse (716 comments) says:

    Don’t worry David, you wont ever get 30Mb/s downloading from anything hosted offshore,

    Posit this, 30Mb/s*100,000 ppl =3Tb/s
    Southern cross currently peaks at around 1.4-1.6 Tb/s with distant promises of 6 TB/s

    UFB is great for local traffic, but until international links are improved I think it will still be a bit of a let down….

    UFB also has some other wrinkles to sort out, like how to power your optical connector when it is installed from a pole to the outside of an old house..

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  3. berend (1,709 comments) says:

    Another National fail. Meddling with the market is extremely expensive, but National will never learn.

    I’m sure most of us would have had VDSL by now if the National Party hadn’t done anything.

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  4. tristanb (1,127 comments) says:

    I’m sure they’ll have an option for no data cap, you just pay per GB. I’d always want a cap when you’ve got such a fast speed –

    If you accidentally leave a torrent going when you leave for the weekend, you could be up for a bill of thousands!

    Caps are there to prevent consumers spending a ridiculous amount. If the guy whinging about his roaming bill had a cap, then he would owe $1000 to Telecom!

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  5. tristanb (1,127 comments) says:

    *wouldn’t owe (just missed the edit by 5 seconds)

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  6. orewa1 (410 comments) says:

    Some capping may be inevitable but yes, this one is laughable and defeats the whole intent of UFB.

    As Isenberg advised the NZ telcos a decade ago – “stop managing scarcity and focus on creating abundance.” the government has created the abundance but now a telco (ironicaaly one the government owns) wants to re- create scarcity across it.

    Come on competitors – lets start the downward bidding war!

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  7. wreck1080 (3,922 comments) says:

    @berend: vdsl is dead-end technology.

    Caps are entirely related to the monopoly data pipe outside of nz.

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  8. Bazar (37 comments) says:

    First off.

    They state its their entry level plan, which suggests they have other plans with larger bandwidth allowances.

    The best advantage to this is the upload, and having hosted several servers on the frustratingly small 0.5-0.7Mb/s upload speed of residential dsl, being able to host servers with 10Mb upload is going to be a pleasure.

    This will become more and more important to those of us who actually upload backups and other large data transfers to the cloud.

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  9. adamsmith1922 (890 comments) says:

    Many years ago cellphones were very expensive, I suggested to a telco that they should severely reduce phone cost and focus on creating call volume, predictably the telco in question laughed at me and said I did not understand.

    Now we see very cheap phones with the ‘market’being traffic volume

    With UFB, the future is content, the pipe is a utility – a utility which needs competition to drive cost down.

    There is no merie in high speed high capacity if the use cost is prohibitive

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  10. rouppe (971 comments) says:

    I had a quick look through their site information.

    After a little bit of digging, you discover that if you have a monitored alarm, you cannot use their “Genius” product, as monitored alarms require a standard phone line…

    Interesting..

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  11. Viking2 (11,484 comments) says:

    And I think you will find that Tesltra have been offering this for a couple of weeks.
    One of my staff tried to connect but after 5 days of frustrating Indian answered calls gave up and went with callplus who are better all round.

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  12. grumpyoldhori (2,362 comments) says:

    National spending billions on so called fibre, who the fuck benefits?
    not the normal punter that is for sure yet we pay.
    So should National have used our money or leave it to the market ?

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  13. virtualmark (1,528 comments) says:

    DPF, the full range of plans/speeds/caps is available at http://www.orcon.net.nz/about/article/new_zealand_launches_into_era_of_affordable_ultra-fast_broadband

    You’ll see there’s multiple data cap options, and a faster speed option too.

    What’s not clear is whether Orcon count NZ-sourced traffic (iSky, TVNZ on demand etc) towards these data caps – with their DSL plans that NZ-sourced traffic is unmetered.

    Geeks need to get realistic about data caps. Bits cost money. ISPs need to make money. The fairest option is that those that use more bits pay more money. Most of the supposedly uncapped plans overseas include soft provisions for the ISP to throttle or cap if they think the user is making “unreasonable use” of the connection. In New Zealand the caps are more overt.

    Dan Frommer puts it well at http://www.splatf.com/2012/03/att-throttling/

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  14. Ed Snack (1,883 comments) says:

    Yep, went onto Orcon’s site and found within seconds a list of the plans, and the $75 with a 30 GB cap is the bottom end plan; you can get up to 1 TB allowance and extra data costs $2/GB. Very sloppy work David.

    And I endorse Virtualmark’s comments too, bandwidth supply is not free and has to be charged for somehow. David’s comments don’t seem to reflect that at all.

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  15. willtruth (243 comments) says:

    “Geeks need to get realistic about data caps. Bits cost money. ISPs need to make money.”

    Except that in the rest of the developed world (e.g. the UK) there are no data caps, and ISPs still make money. So the geeks aren’t really being unrealistic.

    The thing I have never been able to find out is why our ISPs have data caps. What is different about NZ?

    Is it that the data pipe to NZ is not big enough? In which case it is not really the ISPs being greedy/incompetent. It is an infrastructure problem that needs to be solved with investment.

    Or is it that the pipe is owned by a monopoly? In which case it is not necessarily an infrastructure problem. It is a case of ISPs being greedy/incompetent, and it could be solved with a little old fashioned monopoly busting by the Commerce Commission.

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  16. virtualmark (1,528 comments) says:

    willtruth,

    Except that in the rest of the developed world (e.g. the UK) there are no data caps, and ISPs still make money. So the geeks aren’t really being unrealistic.

    Those will be markets with a much higher proportion of “local” (in-country) traffic, which is orders of magnitude cheaper than submarine cables, or where much of the undersea traffic passes over cables bought from receivers for a song about 10 years ago. And they have much bigger populations to spread the cost of that infrastructure over.

    Is it that the data pipe to NZ is not big enough? In which case it is not really the ISPs being greedy/incompetent. It is an infrastructure problem that needs to be solved with investment.

    The pipe is big enough. But it’s long … hence expensive … and there’s just 4.5 million people at the end of it. The investment has been made. But the “investment per head of population” is high, and hence costs are high relative to most other developed countries.

    Or is it that the pipe is owned by a monopoly? In which case it is not necessarily an infrastructure problem. It is a case of ISPs being greedy/incompetent, and it could be solved with a little old fashioned monopoly busting by the Commerce Commission.

    Nope, but another common geek conspiracy theory. Southern Cross price Auck-LA the same as they price Sydney-LA, and Sydney-LA is highly competitive.

    If you want cheap overseas bandwidth then there are 3 options:
    1. You move New Zealand 8,000km closer to Los Angeles; or
    2. You triple the population of New Zealand; or
    3. You build a really big data center here in NZ and mirror all the high-usage internet content locally.

    Personally, if I was king and wanted to make NZ internet cheaper and faster I’d go with option 3. Build a $50 million data center here and offer it to Akamai, Google etc for nix. Cheaper and more immediate benefit than spending $1.5 billion on fibre infrastructure ahead of a viable business case.

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  17. Mark Unsworth (41 comments) says:

    Don’t worry David, you wont ever get 30Mb/s downloading from anything hosted offshore,

    Posit this, 30Mb/s*100,000 ppl =3Tb/s
    Southern cross currently peaks at around 1.4-1.6 Tb/s with distant promises of 6 TB/s

    UFB is great for local traffic, but until international links are improved I think it will still be a bit of a let down….

    UFB also has some other wrinkles to sort out, like how to power your optical connector when it is installed from a pole to the outside of an old house..

    Anonymouse-just a few points.Yes Southern Cross are 1.6 Tb/s at the moment and will be 2 by December and 6 by next December.This is 25 times higher than the original design capacity.When did you last need 6TB/sec I quietly ask and where do you find better specs in australia even? You should check your facts a bit more before making Drury-like statements .

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  18. Mark Unsworth (41 comments) says:

    Virtualmark is on the money.If SX price identically to Nz as they do to Aust and the prices are much cheaper in Oz then its nothing to do with the cable.
    The pipe has vast over capacity as well.Running out is not an issue ,ever!

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